After more research the answer seems to be - no. For Bills it doesn’t matter on the federal level since it is short term and treated like ordinary income. For long term gains on Notes/Bonds held to maturity, the AMD (by the fed and the state of CA) is treated as ordinary income, not as a long term capital gain or as federal interest (CA treats all captured AMD as ordinary income). The only answer to be confirmed is whether you can use lumped sales with losses against AMD gains which I will have to wait and see how it’s reported, but assume there will be no offsets for losses. So if you live in CA or NC, any US bonds are best bought at auction rather than the open market unless in a tax exempt account like an IRA.
